Contractors flout race and age laws

Sunday 16 July 2006 03.47 EDT
First published on Sunday 16 July 2006 03.47 EDT

More than 90 per cent of companies employed by local councils are flouting government-endorsed targets to combat discrimination in the workplace, according to Department of Trade and Industry figures.

Around 270,000 contractors may be hiring fewer ethnic minority and older employees than they should, based on the workforce composition in their location. Although the law does not oblige companies to hire 'quotas' of employees from different backgrounds, there is a requirement that all publicly funded organisations have rigorous hiring procedures to make sure that there is no discrimination.

The same obligations apply to private-sector companies working for local councils, such as catering and waste disposal firms. But very few of these companies - which are paid a total of around £40bn a year by the taxpayer - have any anti-discrimination procedures, according to the DTI statistics. This is a breach of the law, says C2E, a think-tank that has advised the government on discrimination issues.

'All suppliers to the public sector have the same obligations as government departments to make sure they treat employees fairly, in accordance with the race relations act, the disability discrimination act and the equal opportunities act,' said Janet Lakhani, C2E's chief executive. 'But at the moment, that's just not happening.'

The aim of those pieces of legislation was to put the onus on public authorities, which had the power to push through equality measures. But research by C2E suggests that few local councils have sought to quiz suppliers on their employment policies.

'In London less than 30 per cent of local authorities even ask,' said Lakhani. 'Most claim they would remove a supplier failing to meet equality and diversity requirements. But there is little evidence that public bodies are using their purchasing power to promote equality, even though it is their statutory duty.'

Evidence from the courts also suggests that companies are failing to update their procedures in line with legal changes. The cost to business of fighting discrimination, harassment and unfair dismissal lawsuits has risen by 70 per cent in the past three years. Companies in Britain are now spending £210m a year on employment tribunal claims. The figure is expected to soar once private-sector age discrimination becomes illegal this autumn.